Weak Economy Hurts Handheld Shipments

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The total number of handhelds shipped worldwide dropped significantly during the first quarter of this year, reflecting a weak economy. There was sluggish demand from both businesses and consumers. According to a study from market research firm IDC, worldwide handheld device shipments fell over 20% in the first quarter of 2003 when compared with the same quarter last year. Palm maintained its top position in the market while Hewlett-Packard regained the number 2 position from Sony.

Palm continues to lead the market with a 35% share, though it doesn’t completely dominate as it did in past years. It shipped 882 thousand units during the quarter, nearly double the number of its closest competitor.

The real competition was for second place, with HP beating out Sony for the first time in several quarters. IDC gave much of the credit for this to sales of the iPAQ h1910. HP shipped 444 thousand units for 18% of the market. Sony had 400 thousand handhelds shipped for a 16% share.

Dell made a strong showing for a company that released its first models near the end of last year, though it is less than the 10% company execs claimed a few months ago. It actually has 6.5% of the market, shipping 159 thousand units. It easily beat out Toshiba, who has been in the market for years. It shipped 187 thousand units for 3.6%.

Casio has has been concentrating on handhelds for industrial uses rather than consumers and its share of the market has dropped to 3.4%.

Handspring, once a handheld powerhouse, had just 2.9% of the market. However, this study doesn’t cover smartphones, so the Treo wasn’t included. According to Handspring, it sold 39 thousand Treo communicators during the quarter. If these had been added to sales of the Visor line, Handspring would have been in the top 5, if barely.

According to IDC, the total number of handhelds shipped during the first quarter was 2.45 million. This is a big drop from the previous quarter, which isn’t surprising as the fourth quarter of every year is generally very good because of holiday sales, while first quarter is usually the slowest. What is more serious is that this is a year-over-year decline of 21.3%.

“The post-holiday slump in enterprise and consumer spending on handheld devices mirrored the difficult worldwide economic climate,” said Ross Sealfon, research analyst in IDC’s Smart Handheld Devices program. “Beyond the impact of seasonality, concerns of terrorism, war overseas, and continued economic instability hampered device purchases. Despite the availability of new, low-priced models and affordable, highly functional models, handhelds offer limited appeal to the majority of consumers and enterprises.”

These figures include handhelds and data-centric wireless handhelds but not smartphones. They are for handhelds shipped anywhere in the world, whether for sale in retail stores or directly to the consumer or business.

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